LEE ENTERPRISES, Inc (NASDAQ: LEE)

Sector: Communication Services Industry: Publishing CIK: 0000058361
Market Cap 43.16 Mn
P/B -0.89
P/E -1.63
P/S 0.08
ROIC (Qtr) -0.09
Div Yield % 0.00
Rev 1y % (Qtr) -10.03
Total Debt (Qtr) 479.84 Mn
Debt/Equity (Qtr) -9.84
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About

Investment thesis

Bull case

  • Tangible assets of 218.55M provide exceptional 8.42x coverage of deferred revenue 25.96M, showing strong service capability backing.
  • Retained earnings of (335.55M) represent substantial 6.88x of equity (48.74M), indicating strong internal capital generation.
  • Cash reserves of 12.62M exceed inventory value of 4.83M by 2.62x, indicating strong liquidity and inventory management.
  • Free cash flow of 9.36M provides healthy 1.94x coverage of inventory 4.83M, showing efficient inventory management.
  • Tangible assets of 218.55M provide robust 4.28x coverage of receivables 51.11M, showing strong asset quality.

Bear case

  • Operating cash flow of 6.27M provides insufficient coverage of deferred revenue obligations of 25.96M, which is 0.24x, raising concerns about future service delivery capabilities.
  • High receivables of 51.11M relative to inventory of 4.83M (10.59 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 6.27M shows concerning coverage of stock compensation expenses of 1.66M, with a 3.79 ratio indicating potential earnings quality issues.
  • Free cash flow of 9.36M provides weak coverage of capital expenditures of (3.09M), with a -3.03 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 6.27M provides minimal -0.68x coverage of tax expenses of (9.21M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Publishing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NYT New York Times Co 10.36 Bn -238.81 4.11 0.00 Mn
2 PSO Pearson Plc 8.41 Bn 13.92 1.74 -
3 WLY John Wiley & Sons, Inc. 1.73 Bn 13.05 1.06 964.63 Mn
4 SCHL Scholastic Corp 1.25 Bn 28.48 0.67 400.90 Mn
5 LEE LEE ENTERPRISES, Inc 0.04 Bn -1.63 0.08 479.84 Mn
6 EDUC Educational Development Corp 0.01 Bn 2.94 0.47 6.95 Mn
7 TNMG TNL Mediagene 0.00 Bn -0.04 0.07 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 1.30
EV to Cash from Ops. EV/CFO 82.14 24.67
EV to Debt EV to Debt 1.07 2.97
EV to EBIT EV/EBIT 107.26 149.23
EV to EBITDA EV/EBITDA 32.52 17.29
EV to Free Cash Flow [EV/FCF] EV/FCF 54.99 24.30
EV to Market Cap EV to Market Cap 11.93 3.67
EV to Revenue EV/Rev 0.94 1.80
Price to Book Value [P/B] P/B -0.89 3.94
Price to Earnings [P/E] P/E -1.63 -26.01
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.18
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -34.74
Dividend per Basic Share Div per Share (Qtr) 0.00 0.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 26.60
Interest Coverage Int. cover (Qtr) 0.12 -0.64
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -48.38 954.28
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 106.22 8.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.68
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 160.48 1,653.65
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.23 -147.25
EBIT Growth (1y) % EBIT 1y % (Qtr) 173.68 119.12
EBT Growth (1y) % EBT 1y % (Qtr) 25.52 79.49
EPS Growth (1y) % EPS 1y % (Qtr) 40.22 81.09
FCF Growth (1y) % FCF 1y % (Qtr) 3,159.15 652.20
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -5.49 -5.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.92 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.11
Cash Ratio Cash Ratio (Qtr) 0.11 0.23
Current Ratio Curr Ratio (Qtr) 0.74 1.53
Debt to Equity Ratio Debt/Equity (Qtr) -9.84 -1.00
Interest Cover Ratio Int Coverage (Qtr) 0.12 -0.64
Times Interest Earned Times Interest Earned (Qtr) 0.12 -0.64
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.80 -3.80
EBIT Margin % EBIT Margin % (Qtr) 0.88 -11.37
EBT Margin % EBT Margin % (Qtr) -6.51 -16.08
Gross Margin % Gross Margin % (Qtr) 60.30 55.09
Net Profit Margin % Net Margin % (Qtr) -4.80 -17.99